Thanks, again, gaarder. That indeed was the cause of the login trouble.

Back to images on the wiki. I redid the configuration parameter change documented above ($wgEnableUploads), and set not only the images/ directory but every directory in its subtree group- and other-writable.

Now I can upload image files, and all the problematic pages koan linked seem to display correctly now, other than thumbnails of PNG images showing blank (our problem? MediaWiki problem? MS IE problem?).

Let me know if you have any further problems. I'll put a summary of the image support configuration on the wiki later.